Buying Behaviour

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Buying Behaviour
An important part of the marketing process is to understand why a customer or
buyer makes a purchase. Without such an understanding, businesses find it hard to
respond to the customer's needs and wants. Marketing theory traditionally splits
analysis of buyer or customer behaviour into two broad groups for analysis Consumer Buyers and Industrial Buyers
Consumer buyersare those who purchase items for their personal consumption
Industrial buyersare those who purchase items on behalf of their business or
organisation
Businesses now spend considerable sums trying to learn about what makes
customers tick. The questions they try to understand are:
Who buys?
How do they buy?
When do they buy?
Where do they buy?
Why do they buy?
For a marketing manager, the challenge is to understand how customers might
respond to the different elements of the marketing mix that are presented to them.
If management can understand these customer responses better than the
competition, then it is a potentially significant source of competitive advantage.

THE BUYER BEHAVIOUR MODEL

Marketing stimuli
Other Stimuli

Buyer's Characteristics
Buyer's Decision Process
Buyer's decisions
Product
Price
Place
Promotion
Economic
Technological
Political
Cultural
Cultural
Social
Personal
Psychological
Problem recognition
Information search
Evaluation
Decision
Product Choice
Brand choice
Dealer Choice

Purchase timing
Purchase Amount

MAJOR FACTORS INFLUENCING BUYER BEHAVIOUR

The factors influencing buyer behaviour can be broadly classified into: Cultural,
Social, Personal and Psychological. Let us see each one in detail.

01. Cultural Factor :* Cultural factor divided into three sub factors (i) Culture (ii) Sub Culture (iii) Social
Class

o Culture: The set of basic values perceptions, wants, and behaviours learned by a member of
society from family and other important institutions. Culture is the most basic cause
of a person's wants and behaviour. Every group or society has a culture, and cultural
influences on buying behaviour may vary greatly from country to country.

o Sub Culture : A group of people with shared value systems based on common life experiences and
situations.
Each culture contains smaller sub cultures a group of people with shared value
system based on common life experiences and situations. Sub culture includes
nationalities, religions, racial group and geographic regions. Many sub culture make
up important market segments and marketers often design products.

o Social Class: Almost every society has some form of social structure, social classes are society's
relatively permanent and ordered divisions whose members share similar values,
interests and behaviour.

02. Social Factors :* A consumer's behaviour also is influenced by social factors, such as the (i) Groups
(ii) Family (iii) Roles and status

o Groups :-

 Two or more people who interact to accomplish individual or mutual goals.

A person's behavious is influenced by many small groups. Groups that have a direct
influence and to which a person belongs are called membership groups.
Some are primary groups includes family, friends, neighbours and coworkers.
Some are secondary groups, which are more formal and have less regular interaction.
These includes organizations like religious groups, professional association and trade
unions.

o Family: Family members can strongly influence buyer behaviour. The family is the most
important consumer buying organization society and it has been researched
extensively. Marketers are interested in the roles, and influence of the husband, wife
and children on the purchase of different products and services.

o Roles and Status : A person belongs to many groups, family, clubs, organizations.
The person's position in each group can be defined in terms of both role and status.
For example. M & X plays the role of father, in his family he plays the role of
husband, in his company, he plays the role of manager, etc. A Role consists of the
activities people are expected to perform according to the persons around them.

03. Personal Factors:* It includes

* i) Age and life cycle stage (ii) Occupation (iii) Economic situation (iv) Life Style (v)
Personality and self concept.

o Age and Life cycle Stage: People change the goods and services they buy over their lifetimes. Tastes in food,
clothes, furniture, and recreation are often age related. Buying is also shaped by the
stage of the family life cycle.

o Occupation :-

 A person's occupation affects the goods and services bought. Blue collar workers
tend to buy more rugged work clothes, whereas white-collar workers buy more
business suits. A Co. can even specialize in making products needed by a given
occupational group. Thus, computer software companies will design different
products for brand managers, accountants, engineers, lawyers, and doctors.

o Economic situation : A person's economic situation will affect product choice

o Life Style : Life Style is a person's Pattern of living, understanding these forces involves
measuring consumer's major AIO dimensions.
i.e. activities (Work, hobbies, shopping, support etc) interest (Food, fashion, family
recreation) and opinions (about themselves, Business, Products)

o Personality and Self concept : Each person's distinct personality influence his or her buying behavior. Personality
refers to the unique psychological characteristics that lead to relatively consistent
and lasting responses to one's own environment.

04. Psychological Factors:* It includes these Factors.

* i) Motivation (ii) Perception (iii) Learning (iv) Beliefs and attitudes

Motivation :o Motive (drive) a need that is sufficiently pressing to direct the person to seek
satisfaction of the need

Perception :o The process by which people select, Organize, and interpret information to form a
meaningful picture of the world.

Learning:o Changes in an individual's behavior arising from experience.

 Beliefs and attitudes :o Belief is a descriptive thought that a person holds about something
o Attitude, a Person's consistently favorable or unfavorable evaluations, feelings, and
tendencies towards an object or idea.

TRENDS IN BUYING BEHAVIOUR

In the natural & organic food segment, Rick Sterling, founder and president of
Sterling-Rice Group (Boulder, Colo.) sees big food' entering the natural retail
channel with their natural and organic brandsless for volume than for the pedigree
and experience in marketing to an unfamiliar consumer group. It is more important
that food companies learn how to engage a values-based consumer that shops across
natural and conventional outlets than it is for these companies to capture their fair
share' of sales in the natural channel. Sterling believes this to be true for Kraft with
their Back To Nature brand, General Mills with Cascadian Farms, and Kellogg's with
Kashi. All three of these brands involve a consumer segment that the food companies
have not traditionally engaged.
Sterling also sees more brands taking aim at sports clubs and spas, again for
positioning. Clif Bar is good at getting into nontraditional locations with
philosophically aligned people.

THE NATIONAL PORK COUNCIL

By 1985 pork consumption had dropped to 59 pounds per capita from a high of 68
pounds in 1980. The nation was on a anti beef and anti pork kick, favouring leener,
less cholesterol laden poultry. While pork products were actually improved as a
result of new feeding and breeding methods, the public still considered pork an
unhealthy choice. The National Pork Producers Council called up an ad agency Bozell
Inc. to change the image of pork, and it put some $12 million into a national
marketing campaign. The new campaign centered on the slogan, Pork, The other
white meat. Between 1986, when the campaign began, and 1988, pork sales rose
11%- about equal to the gain for chicken, and far ahead of the 2% increase for beef in
the same period.

TYPES OF BUYING BEHAVIOUR

The four type of consumer buying behavior are:

* Routine Response/Programmed Behavior--buying low involvement frequently

purchased low cost items; need very little search and decision effort; purchased
almost automatically. Examples include soft drinks, snack foods, milk etc.
* Limited Decision Making--buying product occasionally. When you need to obtain
information about unfamiliar brand in a familiar product category, perhaps.
Requires a moderate amount of time for information gathering. Examples include
Clothes--know product class but not the brand.
* Extensive Decision Making/Complex high involvement, unfamiliar, expensive
and/or infrequently bought products. High degree of
economic/performance/psychological risk. Examples include cars, homes,
computers, education. Spend alot of time seeking information and deciding.
Information from the companies MM; friends and relatives, store personnel etc. Go
through all six stages of the buying process.
* Impulse buying, no conscious planning.
The purchase of the same product does not always elicit the same Buying Behavior.
Product can shift from one category to the next. For example: Going out for dinner
for one person may be extensive decision making (for someone that does not go out
often at all), but limited decision making for someone else. The reason for the dinner,
whether it is an anniversary celebration, or a meal with a couple of friends will also
determine the extent of the decision making.

BUYER DECISION PROCESS

In general there are three ways of analysing consumer buying decisions. They are:
* Economic models - These models are largely quantitative and are based on the
assumptions of rationality and near perfect knowledge. The consumer is seen to
maximize their utility. Consumer theory, Game theory can also be used in some
circumstances.
* Psychological models - These models concentrate on psychological and cognitive
processes such as motivation and need recognition. They are qualitative rather than
quantitative and build on sociological factors like cultural influences and family
influences.

* Consumer behaviour models - These are practical models used by marketers. They
typically blend both economic and psychological models.

Models of buyer decision making

General model
A general model of the buyer decision process consists of the following steps:
1. Problem recognition;
2. Gathering Information
3. Alternative education
4. Purchase decision
5. Post-purchase behavior/buyer's remorse (cognitive dissonance)
There are a range of alternative models, but that of AIUAPR, which most directly
links to the steps in the marketing/promotional process is often seen as the most
generally useful;
* AWARENESS - before anything else can happen the potential customers must
become aware that the product or service exists. Thus, the first task must be to gain
the attention of the target audience. All the different models are, predictably, agreed
on this first step. If the audience never hears the message, they will not act on it, no
matter how powerful it is
* INTEREST - but it is not sufficient to grab their attention. The message must
interest them and persuade them that the product or service is relevant to their
needs. The content of the message(s) must therefore be meaningful and clearly
relevant to that target audience's needs, and this is where marketing research can
come into its own.
* UNDERSTANDING - once an interest is established, the prospective customer
must be able to appreciate how well the offering may meet his or her needs, again as
revealed by the marketing research. This may be no small achievement where the
advertiser has just a few words, or ten seconds, to convey their message.

* ATTITUDES - but the message must go even further; to persuade the reader to
adopt a sufficiently positive attitude towards the product or service that he or she will
purchase it, albeit as a trial. There is no adequate way of describing how this may be
achieved. It is simply down to the magic of the advertiser's art, or based on the
strength of the product or services itself.
* PURCHASE - all the above stages might happen in a few minutes while the reader
is considering the advertisement; in the comfort of his or her favorite armchair. The
final buying decision, on the other hand, may take place some time later; perhaps
weeks later, when the prospective buyer actually tries to find a shop which stocks the
product.
* REPEAT PURCHASE - but in most cases this first purchase is best viewed as just a
trial purchase. Only if the experience is a success for the customer will it be turned
into repeat purchases. These repeats, not the single purchase which is the focus of
most models, are where the vendors focus should be, for these are where the profits
are generated. The earlier stages are merely a very necessary prerequisite for this!
This is a very simple model, and as such does apply quite generally. Its lessons are
that you cannot obtain repeat purchasing without going through the stages of
building awareness and then obtaining trial use; which has to be successful. It is a
pattern which applies to all repeat purchase products and services; industrial goods
just as much as baked beans. This simple theory is rarely taken any further - to look
at the series of transactions which such repeat purchasing implies. The consumer's
growing experience over a number of such transactions is often the determining
factor in the later - and future - purchases. All the succeeding transactions are, thus,
interdependent - and the overall decision-making process may accordingly be much
more complex than most models allow for.

Cognitive and personal biases in decision making

It is generally agreed that biases can creep into our decision making processes,
calling into question the correctness of a decision. Below is a list of some of the more
common cognitive biases.
* Selective search for evidence - We tend to be willing to gather facts that support
certain conclusions but disregard other facts that support different conclusions.
* Premature termination of search for evidence - We tend to accept the first
alternative that looks like it might work.

* Conservatism and inertia - Unwillingness to change thought patterns that we have

used in the past in the face of new circumstances.
* Experiential limitations - Unwillingness or inability to look beyond the scope of our
past experiences; rejection of the unfamiliar.
* Selective perception - We actively screen-out information that we do not think is
salient.
* Wishful thinking or optimism - We tend to want to see things in a positive light and
this can distort our perception and thinking.
* Recency - We tend to place more attention on more recent information and either
ignore or forget more distant information.
* Repetition bias - A willingness to believe what we have been told most often and by
the greatest number of different of sources.
* Anchoring - Decisions are unduly influenced by initial information that shapes our
view of subsequent information.
* Group think - Peer pressure to conform to the opinions held by the group.
* Source credibility bias - We reject something if we have a bias against the person,
organization, or group to which the person belongs: We are inclined to accept a
statement by someone we like.
* Incremental decision making and escalating commitment - We look at a decision as
a small step in a process and this tends to perpetuate a series of similar decisions.
This can be contrasted with zero-based decision making.
* Inconsistency - The unwillingness to apply the same decision criteria in similar
situations.
* Attribution asymmetry - We tend to attribute our success to our abilities and
talents, but we attribute our failures to bad luck and external factors. We attribute
other's success to good luck, and their failures to their mistakes.
* Role fulfillment - We conform to the decision making expectations that others have
of someone in our position.

* Underestimating uncertainty and the illusion of control - We tend to underestimate

future uncertainty because we tend to believe we have more control over events than
we really do.
* Faulty generalizations - In order to simplify an extremely complex world, we tend
to group things and people. These simplifying generalizations can bias decision
making processes.
* Ascription of causality - We tend to ascribe causation even when the evidence only
suggests correlation. Just because birds fly to the equatorial regions when the trees
lose their leaves, does not mean that the birds migrate because the trees lose their
leaves.

BRAND POSITIONING
it is the added value or augmented elements that determine a brand's positioning
in the market place.
Positioning can be defined as follows:
Positioning is how a product appears in relation to other products in the market
Brands can be positioned against competing brands on aperceptual map.
A perceptual map defines the market in terms of the way buyers perceive key
characteristics of competing products.
The basic perceptual map that buyers use maps products in terms of their price and
quality, as illustrated below:

Quality
Low High
ECONOMY BRANDS
BARGAIN BRANDS
COW BOY BRANDS
PREMIUM BRANDS

Price: Low

High
Once you determine the way in which you can reach your market, the next thing to
look at is how you are going to lure your customer to try your brand.
Here is a list of nine positioning types you can think of before deciding on which one
you will attach to your brand:
1. Quality positioning
2. Value positioning
3. Feature-driven positioning
4. Relational positioning
5. Aspiration positioning
6. Problem/solution positioning
7. Rivalry-based positioning
8. Warm and fuzzy positioning
9. Benefit-driven positioning

COMMUNICATION TOOL
Childhood obesity has become a nationwide epidemic. Television food advertising is
a known contributor to this problem but little research has examined newer
marketing venues such as the Internet. Accordingly, a content analysis of online food
marketing practices was conducted for four popular children's websites:
CartoonNetwork.com, Nick.com, Neopets.com, and Candystand.com. Consistent
with patterns in television advertising, results indicate that the food products
marketed online are high in calories and low in nutrients. Candy, sweetened
breakfast cereals, snacks, and quick serve restaurants dominated. Candystand.com, a
food-based website, exhibited the greatest amount of food marketing. The types of
marketing appeals used to promote these foods ranged from clearly delineated
advertisements, to more immersive marketing techniques such as product
placements, advergames,' and integrated marketing pages. Common to all marketing
appeals was the use of attention-getting features, such as dynamic images,
bold/colorful text, and animation, as well as child-directed branded characters.
Because the foods marketed online are not consistent with a healthy diet, it is
recommended that additional steps be taken to regulate online marketing practices.

COMMUNICATING THE COMPANIES POSITIONING

Once the company has developed a clear positioning strategy, it must communicate
that positioning effectively. Suppose a company chooses the best in quality strategy.
Quality is communicated by choosing those physical signs and cues that people
normally use to judge quality. Here are some examples:
A lawn mover manufacturer claims its lawn mover is powerful and uses a noisy
motor because buyer think noisy lawn movers are more powerful.
Truck manufacturer undercoats the chassis not because it needs undercoating but
because undercoating suggests concern for quality.
Quality is also communicated through other marketing elements. A high price
usually signals a premium product to the buyers. The products quality image is also
affected by the packaging, distribution, advertising and promotion. Here are a few
cases were the brands quality image was hurt.
A well known frozen food brand lost its prestige image by being on sale too often.
A premium beers image was hurt when it switched from bottle to cans.
A highly regarded television receiver lost its quality image when mass merchandise
outlets began to carry it.
For an organic food manufacturing company, its important that the quality aspect is
given due importance. The highlighting of the quality of food product, packaging and
the freshness it provides along with the highlighting of the nutrient contents will be
of great help to the promotion of the product. Especially when the product is a baby
food, health will be the main concern of the buyer. The communication message will
be attractive if the content carries something related to purity; for example, the
image of a baby, nature etc.